LFM leadership evades accountability, retrenchments loom
As Seaboard exits, secrecy leaves workers and nation in the dark
TEBOHO KHATEBE MOLEFI and
MOTSAMAI MOKOTJO
MASERU – The leadership of Lesotho Flour Mills (LFM) is facing intense scrutiny for a blatant evasion of accountability regarding the impending retrenchment of 25 employees, exposing a deep crisis in corporate governance and transparency at the vital national company.
The controversy deepened as government ministers responsible for overseeing the state’s interest in LFM also refused to engage with the media, raising serious concerns about political oversight and its role in the unfolding corporate drama.
Public Eye’s attempts to clarify the rationale behind the job cuts were met with a circular run-around from the LFM board. Board member Puleng Lebitsa referred all questions to CEO Fourie Du Plessis, while fellow board member, Selebalo Ntepe, directed inquiries to chairperson, Mazvi Maharasoa. Maharasoa herself dismissed questions, stating it was “too early” to discuss the matter, before subsequently becoming unreachable.
This communication breakdown stands in stark violation of the Mohlomi Corporate Governance Code, which mandates transparent, holistic decision-making by corporate boards.
The pattern of evasion extends to the highest levels of government.
Minister of Trade, Mokhethi Shelile, explicitly refused an interview, citing personal grievance with this publication.
His refusal came after questions regarding his ministry’s puzzling decision to seek a fresh review from the African Legal Support Facility (ALSF) on its separation from Seaboard Overseas Management – LFM’s majority shareholder – despite a 2019 ALSF report explicitly recommending the split.
Similarly, Minister of Finance, Dr Retšelisitsoe Matlanyane, has blocked these reporters after Public Eye covered a separate multi-million Maloti energy agreement.
The pressure appears to be mounting internally.
Sources report that Chairperson Maharasoa, visibly upset following a previous article, visited the LFM’s Maseru offices, though it was unclear if she was acting on behalf of the board.
The current retrenchment mirrors a similar move by CEO Du Plessis in December 2024, which saw over 40 workers laid off without a comprehensive explanation to the board on the necessity or efficacy of the cost-cutting measures.
The lack of transparency has drawn fierce criticism from labour representatives. In a letter to Du Plessis, Tšeliso Ramochela, Secretary General of the National Union of Commerce and Allied Workers, accused LFM of conducting a mere “notification of a decision already made” rather than a good-faith consultation.
He demanded the company fulfil its legal obligation to disclose detailed reasons for the layoffs and the alternatives considered.
This internal turmoil coincides with a major shift in ownership.
A letter from Seaboard CEO, Jack Bresky, to finance minister Matlanyane, dated December 9, 2024, reveals the majority shareholder has reached a critical juncture.
Bresky stated that the LFM “does not achieve the strategic benchmarks required for our continued investment” and formally notified the government of Seaboard’s intention to sell its shares.
This decision highlights the urgency for sound governance, particularly given LFM’s notorious 27-year history of failing to pay dividends to the government.
The actions of LFM’s leadership appear to also directly contradict the Companies Act of 2011 and the King IV Report on corporate governance. These frameworks mandate directors to act in good faith, with due diligence, and in the best interest of the company as a whole – a concept that amalgamates the interests of employees, the community, and the nation, not just shareholders.
The unfolding saga at LFM serves as a critical test case for corporate accountability in Lesotho. The evasion of questions, the disregard for labour laws, and the failure of governance mechanisms threaten not only the livelihoods of employees but also the stability of a key national enterprise and the economic interests of the Basotho people.
LFM and the crisis of corporate governance
As the storm brews behind the corporate walls of LFM, a company that should stand as a beacon of national industry and ethical business practice, stands on the brink. A deeply concerning pattern of behaviour from its management has emerged, one that flies in the face of modern corporate law, ethical stewardship and the very social contract that binds a business to its community.
The management’s persistent evasion of questions regarding the company’s precarious financial status and the looming spectre of mass retrenchments represents a fundamental betrayal of the duties mandated by both the Companies Act and the globally recognised King IV Report on corporate governance.
At the core of this issue is a profound misunderstanding, or perhaps a deliberate disregard, of what it means to be a company director in the 21st century. The archaic notion that a company exists solely to maximise shareholder profit has been rightfully consigned to history.
The Lesotho Companies Act of 2022 codifies a more progressive, inclusive, and ultimately sustainable model. It mandates that directors must act in good faith, with due care, skill, and diligence, not just for the company, but for its employees, the community, and the nation at large. This is not a suggestion, it is a legal requirement.
Similarly, the King IV Report, a gold standard for governance, champions the concept of stakeholder inclusivity. It asserts that the governing body should serve the legitimate interests and expectations of stakeholders, including employees who rely on the company for their livelihood and the community that supports its existence.
In times of crisis, this duty is not diminished; it is magnified.
The actions – or more accurately, the inactions – of the LFM management stand in stark contradiction to these principles. Their refusal to engage in transparent communication about the company’s financial health is a failure of the most basic duty of good faith.
Employees, who have dedicated years of service, are left in a state of agonising uncertainty, hearing whispers of retrenchment but denied official confirmation or a clear plan. This is not governance; it is a dereliction of duty that causes immense human anxiety and erodes the very fabric of trust that holds an organisation together.
This opacity is particularly egregious when considering the potential for retrenchment. Let us be clear: retrenchment is not merely a financial transaction; it is a seismic event with devastating human consequences. It ripples outwards, affecting families, local businesses, and the broader community.
The King IV framework is explicit: the governing body must ensure that the organisation is and is seen to be a responsible corporate citizen. This entails managing the social impact of its operations and ensuring fair and responsible treatment of stakeholders, especially during downsizing.
By refusing to communicate, management is making a conscious choice to prioritise the interests of a select few – likely shareholders fearing short-term loss – over the well-being of its entire stakeholder ecosystem.
They are attempting to evade the difficult but necessary conversations about restructuring, potential rescue plans, severance packages, and outplacement support.
This approach is not only ethically bankrupt but also commercially short-sighted. A demoralised workforce and an alienated community are not assets for a company seeking to navigate a crisis and emerge stronger.
The people of Lesotho, and particularly the employees of LFM, deserve better. They deserve leadership that embodies Botho — a leadership of respect, humility and communal responsibility. They deserve directors who understand that their fiduciary duty is a holistic one, encompassing the health of the nation as much as the health of the balance sheet.
It is time for the board of Lesotho Flour Mills to be held accountable. Regulatory bodies must scrutinise their compliance with the Companies Act. Shareholders with a long-term vision must demand transparency.
Most importantly, the employees and the community must have their voices heard. Silence in a crisis is not a strategy; it is an admission of failure.
The true test of corporate leadership is not navigating calm waters, but steering the ship with courage and integrity through the storm. On that count, the current management of the LFM is failing profoundly.
